Car Insurance A Brief Report

Introduction: Car Insurance, also known as vehicle, auto or motor insurance, is the insurance which is generally meant for all types of road vehicles. Its purpose is to provide financial assistance against any physical damage and body injury caused by traffic accidents. The various terms and conditions of vehicle insurance vary with legal regulations of different regions. Now-a-days, there are a wide range of insurance policies available in the market that one can choose from. This requires regular premium payments, similar to other types of insurances. Often, the insurance includes both the vehicle and the driver or other occupants depending on the types of policies.

Need for Car Insurance: Let us consider a situation. You buy a brand new expensive car and take it out for a drive and then accidentally someone bumps your car from behind. In such a case, if the vehicle is insured all the coverage against any kind of financial loss caused due to the damage of the car is provided by the insurer. The insurance is applicable only if the damage is caused due to an accident, natural calamity or sufficient proof is available if the car has been stolen. Thus car insurance is basically an arrangement between the vehicle owner and the insurer.


Types of Car Insurance: Car Insurance policies are generally of two types - Third Party Liability Cover and Comprehensive Cover Package Policy. Third party liability covers against all legal liability resulting from any accident of the vehicle. It includes property damage to third party, injury or even death. But it does not include any compensation against damage to the vehicle. This cover is mandatory in most countries including India under the Motor Vehicles Act. It includes personal accident benefits for the owner or for the paid driver as well as the other occupants of the vehicle. It also includes legal protection for death or injury claims from third parties.

Comprehensive package policy offers protection to the owner as well as the vehicle. It comprises damages caused to the vehicle and its accessories due to natural or man-made calamities. The insurance package may cover the cost up to Rs. 2 lakhs for a premium of only Rs.100. However, this may vary according to the various policies offered by different insurance companies. This comprehensive policy includes benefits in case of external damage caused by accidents, damage caused by flood, earthquake, storm, fire, explosion, theft or violent acts including riots and strikes.


Conclusion:
Car insurance is mandatory for all vehicles before using it on public roads. It also has many limitations. This must be carefully noted by all consumers that car insurance does not include the car's electrical or mechanical breakdown or the damage caused due to drunken driving or when the vehicle is used outside the geographical area. However, this provides all compensations in case of serious damages as described earlier. Thus it is beneficial in many respects as it ensures the protection and security of the owner's vehicle. People have become conscious now and they insure their car as soon as they buy it.